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NJ Introduction Bahrain, just like any other financial center, provides an environment where domestic and international trade is conducted on large scale. The Bankers’ Society of Bahrain (BSB) (n.d.) states that Bahrain has been known to be a strategic trading point between the East and the West.Advertising We will write a custom essay sample on NJ International Finance Management Mids of these industries include oil, gas and aluminum. However, most industries are being privatized. Therefore, all industries are now open to foreign investors (Ernst and Young, 2012). For instance, in 2006, government of Bahrain privatized electricity production and transferred control of parastatals to a quasi-independent holding company (USDC, 2012). This reaffirmed Bahrain’s commitment in running profitable businesses. Moreover, foreign companies receive the same incentives as companies from Bahrain (Ernst and Young, 2012). Additionally, Bahrain’s commercial and legal laws are consistent with international standards. Commercial laws are also reviewed from time to time to accommodate any changes made internationally (Ernst and Young, 2012). For that reason, Bahrain should be an emerging market of choice for many businesses regardless of their place of origin. Ernst and Young (2012) also add that companies operating in Bahrain are required to present their financial reports using internationally accepted Standards. In addition, Bahrain’s modern laws provide favourable environments for doing business. Some of the best laws include labour and commercial laws (USDC, 2012). For instance, expatriates can change jobs more easily in Bahrain than in most countries in the Gulf region. This brings about flexibility in the labour market. Workers also have the right to join unions to fight for better terms. In addition, there are laws that protect foreign workers from abuse (USDC, 2012). According to the USDC (2012), Bahrain’s gross domestic product ( GDP) has been on the rise. Recent reports indicate that Bahrain’s has enjoyed an economic growth of between four to five percent yearly. In 2010, Bahrain’s GDP stood at $21.3 billion (USDC, 2012).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Moreover, Bahrain has been able to maintain price inflation at low levels (USDC, 2012). For that reason, this financial center’s currency has remained stable. This is an added advantage to Bahrain as a financial center. English is also spoken widely in Bahrain. This makes easier for most people to express themselves. However, a few factors discourage investors from investing in Bahrain. For instance, there are no clear differences between the government and the private sector. As a result, there has been conflict of interest (USDC, 2012). The USDC (2012) also adds that the tendering process has not been transparent enough in some cases. In other cases, the government has been found to favour certain business men (USDC, 2012). This act disadvantages other competitors who are not highly connected with government officials. In addition, foreign investors who do not have local partners are discriminated upon. There are also few incidents of bureaucracy and poor coordination among ministries (USDC, 2012). Moreover, the government of Bahrain forces a company to employ a certain number of Bahrain citizens (USDC, 2012). Failure to do leads to a fine. Furthermore, the government of Bahrain intentionally makes it difficult for foreign firms to secure work permits and visas for foreign employees (USDC, 2012). This forces these companies to employ Bahraini citizens. As a result, the firms produce goods and service of low quality. In addition, these firms lack the required experts in various fields. In some cases, companies are forced to relocate from Bahrain. Finally, a few months ago Bahrain was on the international media for the wrong reasons. Bahraini citizen were protesting due to political and economic injustices. Such scenes kept investors away from Bahrain. However, Bahrain has been able to overcome these unrests (Albawaba, 2011) Degree of Success and Future Prospects Bahrain is recognized by its prowess in financial management. This makes the central bank o f Bahrain one of the most respected financial institutions in the Middle East (Albawaba, 2011). Apart from being the first country to indentify the need to diversify the economy, Bahrain was the first country to discover oil in the Gulf region in the modern era (BSB, n.d.). Bahrain’s transportation and communication are also in standards that attract and foster investments (USDC, 2012). Likewise, other types of infrastructure are of standards that encourage business development. Therefore, any form of investment will survive in Bahrain. Compared to eighty three economies, Bahrain is ranked 38th by the World Bank on the ease of doing business (World Bank, 2012). This makes it the 4th best economy in the Middle East. The World Bank report also places Bahrain on 82nd and 126th position on ease of starting a business and getting credit respectively. Additionally, this financial center is ranked 7th in dealing with construction permits, 18th in paying taxes , 25th in resolving ins olvency, 30th in registering property and 49th in trading across borders. Furthermore, Bahrain is ranked 79th in protecting investors, 49th in accessing electricity and 115th in enforcing contracts. This shows that Bahrain fairs well as compared to other countries where doing business is not a complicated matter. Bahrain has experience a steady increase in the number of financial institutions. Despite fluctuations in oil prices, these institutions have continued to post profits and positive growth (BSB, n.d.). In March 2006, the International Monetary Fund Financial Sector Assessment Programme (FSAP) conducted a review of the financial sector in Bahrain (BSB, n.d.). The results of this review indicated that Bahrain’s financial regulations were modern and effective. In the same year, Fitch Ratings changed Bahrain’s credit outlook from stable to positive (BSB, n.d.). This rating meant that the world recognized Bahrain’s financial and economic strength. In 2010, Th e Global investor Magazine named Bahrain as the best financial center (BEDB, 2010). The Global investor Magazine is a publication associated with the Euromoney (BEDB, 2010). For that reason, this award cannot be disputed. The award was given to Bahrain because of providing excellent financial services for a long time. Additionally, the award recognized the good work done by the Central Bank of Bahrain. This reward, hence, portrayed Bahrain’s leadership in the financial sector. Bahrain has also been able to establish a transparent business environment (Albawaba, 2011). Its laws are non-discriminatory and the tendering process is not questionable in most cases. Moreover, Bahrain overcame recent unrest brought about by bad economic policies (Albawaba, 2011). This showed that Bahrain has the capability to offer instant solutions to any situation that threatens to disrupt its economic progress. Bahrain faces stiff competition from other financial centers such as Dubai and Qatar. T herefore, to increase its competitiveness, Bahrain targets to improve six economic sectors† (USDC, 2012).These sectors include â€Å"tourism, health care, information and communication technology, education and training, business service and financial services† (USDC, 2012). Moreover, one of the growing sectors in Bahrain is Islamic banking (Albawaba, 2011). Although Islamic banking has been associated with the Middle East for a long time, Western countries are adopting it. This is something that Bahrain can present to foreign investors who want to diversify. Conclusion Throughout history Bahrain has been known to be a strategic trading point between the East and the West (BSD, n.d.). Therefore, Bahrain is one of the most renowned financial centers in the Middle East. Bahrain future as an economic center looks bright. Bahrain’s economic and financial policies have laid a solid foundation for future investments. Additionally, to increase its competitiveness, Bahra in has prioritized six sectors. These are the sectors that Bahrain wants to improve in order to consolidate its position as a world and regional financial center (USDC, 2012). References Albawaba. (2011). Bahrain still a leading financial centre: capinnova. Retrieved from albawaba.com/bahrain-still-leading-financial-centre-%E2%80%93-capinnova-380888 Bahrain Economic Development Board. (n.d.). Bahrain- the center of financial services in the Gulf and Middle East. Retrieved from bahrainedb.com/bahrain-financial-services.aspx Bahrain Economic Development Board. (2010).Bahrain named financial center of the year. Retrieved from bahrainedb.com/press-bahrain-named-financial-center-of-the-year.aspx Bankers’ Society of Bahrain. (n.d.). Bahrain an international banking and financial centre. Retrieved from www.banksbahrain.org/media/pdf/BSBBrochure-reduced.pdf Businessdictionary.com. (n.d). Financial center. Retrieved from businessdictionary.com/definition/financial-center.html Ernst Y oung. (2012). Doing business Bahrain 2011. Retrieved from http://emergingmarkets.ey.com/doing-business-in-bahrain-2011/ Security Industries Association. (n.d.).The key building blocks of world class financial centers. Retrieved from www.ita.doc.gov/td/finance//World_Class_Financial_Center.pdf http://dspace.mit.edu/bitstream/handle/1721.1/63624/formationoffinan00kind.pdf?sequence=1 United States Department of Commerce. (2012). Doing business Bahrain: 2011 country commercial guide for U.S. companies. Retrieved from http://photos.state.gov/libraries/embassy/164325/2011pd/2011%20Bahrain%20Country%20Commercial%20Guide.pdf World Bank. (2012). Economy profile: Bahrain. Doing business 2012. doingbusiness.org/~/media/fpdkm/doing%20business/documents/profiles/country/bhr.pdf